Affiliate Marketing helps promote business online through affiliations. Affiliates are actually web sites or networks of web sites that direct traffic or potential customers to a particular merchant web site/ network that sells a product/service online.
In return, the affiliate is paid a commission/finder’s fee for every visitor, subscriber and/or customer provided via the affiliate address. Compensation is based on clicks received, registrations, subscriptions, memberships or sale.
In net parlance, it could be based on Pay Per Click, Pay Per Lead or Pay Per Sale. It is a performance-based model and the merchant pays the affiliate only after results are accrued or a sale is made.
The power of affiliation unleashed
A lot of businesses owe their online success and growth to the power of affiliate marketing. Many acknowledge a 15-20% increase in online revenues to affiliate marketing. Affiliate marketing has proved to be a cost-effective, measurable method of delivering long-term results over the years.
Affiliate Marketing is commonly implemented by e-businesses via affiliate programs and third party services provided by intermediaries who track traffic or sales that are referred by affiliates. Some advertisers offer multi-level marketing type of affiliate programs that distribute commission into a hierarchical referral network of sign-ups and sub-affiliates.
An Affiliate network acts as a third party between the merchant and the associated affiliates. It delivers the merchant’s campaigns and offers and also collects commission from the merchant and pays the affiliates who are part of the program.
Ample choice and total support from affiliate managers and networks
Online merchants looking out for an affiliate strategy to supplement their online sale strategy have various types of affiliate management solutions that include customized software, third party affiliate networks, hosted services, affiliate-sponsored shopping carts and more.
Easy to deploy and inexpensive, Affiliate marketing is a win-win situation for both the merchant and the affiliate. The merchant maintains and operates the affiliate program by finding a fit affiliate. He has greater access to markets and customers conveniently. It is the merchant who decides how much he is willing to pay for each sale through an affiliate lead.
On the other hand, Affiliate marketing can generate a full-time income for the affiliate. For this, he needs to have a proper understanding of the merchant’s business and product and determine whether his user base is the right kind. Some merchants also provide targeted, best-selling items and support to their affiliates and also offer sales promotions beneficial to both.